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The music industry is losing $2.65 billion as businesses fail to stream properly, study finds

By | Published on Tuesday 16 October 2018

Soundtrack Your Brand

New research commissioned by the leading provider of B2B streaming – the Spotify-backed Soundtrack Your Brand – reckons that the music community is missing out on $2.65 billion per year because of businesses using personal streaming services in commercial spaces.

As the streaming music business matures, some reckon that an extra significant revenue stream will be B2B streaming, where companies pay premium rates to stream music on commercial premises. Various start-ups have been dabbling in this space for a while, though getting the market properly established requires letting the owners of commercial premises know that they can’t just stream music from a personal £10 a month Spotify account.

Many are probably unaware that doing so is in breach of the terms and conditions on a personal account. Those businesses also need additional licences for the public performance that takes place when those streams are played in a public space.

The study was carried out by Nielsen Music for Soundtrack Your Brand, which now provides B2B streaming options in multiple countries. The researchers spoke to just under 5000 small business owners in the UK, US, Sweden, Spain, Italy, Germany and France, and found that 83% of respondents were using personal streaming accounts to play music to staff and customers.

Based on this, Nielsen then did a bunch of maths. It estimated a global market of 29.4 million small businesses with a physical location, of which 21.3 million are potentially using personal rather than B2B streaming services. From there it extrapolates that $2.65 billion per year figure of lost income.

In the UK, the study found that 31% of small business owners did not have any licences to play music or were not sure if they did. In addition to that, 60% believed that it was legal to use a personal streaming account to play music publicly.

Of the businesses interviewed, 88% said that they played music 4-5 days per week, and just over 80% said that music was important or very important to their business. A total of 86% also said that they were willing to pay for a service through which they can play music on their premises – although many already believed they were legitimately doing so by paying for a personal streaming account.

“This study should be a wake-up call for the music industry”, says Soundtrack Your Brand Co-Founder Andreas Liffgarden. “Music makers are being short-changed without knowing it. Consumer streaming companies have millions of customers who are actually businesses, who may be unknowingly misusing their services and not paying music makers the money they are entitled to, which is potentially in the billions of dollars”.

While the standard monthly price for a personal streaming service is £10 per month in the UK, B2B services can cost two to three times more than this.

Read the full study here.